Do you want to know how much it will cost you to have a baby because you´re trying to decide on whether or not it is the right time for you and your partner?
Then continue on reading…
We´ve struggled with this question as well…
The challenge we faced? We both felt emotionally ready, but… we had no clarity on how much having a baby would cost on a monthly basis - if we could even afford to have a baby…?
Feeling financially unprepared and the idea of having a baby created a terrifying imagination of our future - where pregnancy and life after birth would be a struggle - burying ourselves in debt, turning all the emotional readiness into tremendous stress.
Not only did this idea cause a lot of hesitation in having a baby, but also kicked off the need to gain clarity on the costs of having a baby, if we were to have a child anytime soon… which led to the next stumbling block…
When thinking of the costs of having a baby, as we soon learned - there's just so much to think of and pay attention to...
With a lot of time and energy invested, and the great resources we found, we´ve put together our findings in this guide to help you gain the financial clarity you are seeking so you and your partner can come to a clear decision on whether or not it is the right time for you to have a baby.
The Structure of this Guide:
To break this overwhelming subject down, we have structured the information in a way that will help you to develop a figure of the monthly budget you will want to plan for your individual situation, preferences and circumstances.
As we found, there are various costs from the time of pregnancy to the first year of a child’s life that you may want to take into consideration.
We have split step 2 in this guide into the following 3 sections:
- Budgeting for pregnancy
- Budgeting for delivery
- Budgeting after birth
The Outcome of this Guide:
Our goal by the end of this guide is to help you have developed a ballpark figure - an estimate of what your monthly available budget should be if you decide to have a baby.
Once you´ve worked through this guide you will feel A LOT MORE certain on whether or not you and your partner are financially ready to have a child.
The information gathered on average costs in this guide are based on living in the United States. When living in the U.S. you will also want to pay close attention to what your health insurance will cover, as we will be mentioning points to look out for below.
Step 1 - Define your financial framework for decision making
Before moving on to learn about the expenses that come with having a baby, take a moment to talk about your financial needs/musts/wants with each other.
This step is crucial as it helps you consider all financial areas of your life and supports you to set a foundational agreement regarding your finances that you can always come back to and base your decisions on.
Our financial guidelines for having a child became the following:
Example of financial terms and conditions for having a baby
Example of financial sacrifices for having a baby
Example of financial goals in relation to starting a family
Just as well as setting your terms and conditions and deciding on what you´re willing to sacrifice it also makes sense to talk about your financial goals in relation to starting your family after having a child so you can anticipate the development in that direction and plan for the future:
Your Action Step: Set Up Your Own Financial Framework.
Set up your own financial guidelines for decision making by answering the following 3 questions:
After you have set up your financial framework for yourselves as well, it is now time to learn about the financial costs of having a baby and possible challenges ahead so you can figure out your game plan to win.
Step 2 - Determine your budget required for the costs of having a baby
When we did our research on the costs of having a baby, these are the 3 key questions we focused on answering:
Yes, having a baby in the U.S. can be quite expensive. But as you will learn, the costs will vary based on the state you live in, your personal preferences and circumstances. The time you invest into gaining clarity on how much having a baby will cost you, could save you from spending thousands of dollars and having to go through experiencing tremendous stress.
Let's begin learning about what to budget for.
Health Insurance 101
If you are just starting out on learning about the vocabulary and the differences between health insurance options, policygenius.com offers a helpful place to start learning about the health insurance basics.
Budget for the costs of pregnancy
In general, as Lamaze Internationals mentions, the costs a couple should consider during pregnancy are:
Medical Care during pregnancy
Medical care may be your highest expense during pregnancy - especially, if you don’t have health insurance.
If you do have health insurance, depending on what your insurance policy covers will determine how much your pregnancy will cost you.
For medical care during pregnancy, the costs that you should expect as Lamaze International states, include:
Prenatal Visits during pregnancy
Women who are pregnant will have a range of 7 to 12 prenatal visits during pregnancy.
During a prenatal visit your doctor will check your health and the health of your baby.
Basic procedures to expect during your prenatal exam are:
- Urine test
- Blood pressure
- Fetal heart rate
- Checking the abdomen
- Feeling for baby’s position
Costs of prenatal visits during pregnancy
If You Have health insurance
If You Have Any Complications During Your Pregnancy Or Require additional Prenatal visits
If you do not have health insurance
Ultrasounds during pregnancy
The Beth Israel Deaconess Medical Center states that women with a healthy pregnancy will generally receive only 2 ultrasounds during pregnancy, regardless where in the states they live.
In that case you will receive one ultrasound during the first trimester which will confirm the due date of the baby, and the second ultrasound at about 18-22 weeks into your pregnancy. This one will “confirm normal anatomy and the sex of the baby” as Monica Mendiola, MD, a practicing Physician in women´s health states on bidmc.org.
Costs of ultrasounds during pregnancy
If You Have health insurance
If You Have Any Complications During Your Pregnancy Or Require Additional ultrasounds
if you do not have health insurance
Lab work, Tests and Screens during pregnancy
Below we have listed common tests you may experience during each trimester according to kidshealth.org:
Possible tests during the first trimester
Possible tests during the second trimester
Possible tests during the third trimester
We mention this list not to scare you off, but more as a way to raise awareness and emphasize how important it is to do your research with regards to prenatal costs beforehand.
Depending on many factors such as your age, health, family history and more you may receive more or less testing.
The question of how much your out-of-pocket costs are can only be answered in relation to whether or not you have a health insurance plan and what is considered routine or beyond routine (“diagnostic”) by your health insurance policy.
Costs of Lab work, Tests and Screens during pregnancy
If You Have health insurance
If You Have Any Complications During Your Pregnancy Or Require Additional Testing
if you do not have health insurance
Any special care needed during pregnancy
As mentioned above any testing, or procedure that goes beyond your routine prenatal visit may require some out-of-pocket costs.
These extra tests will be billed separately to your insurance and you may be required to pay a certain amount based on your insurance policy.
However, there are some additional tests that your insurance will cover.
Costs of special care during pregnancy
If You Have health insurance
If You Have Any Complications During Your Pregnancy Or Require Additional Testing
if you do not have health insurance
Your Action Step: Gain clarity on what your health insurance plan covers during pregnancy
If you have health insurance, based on your insurance policy the costs of routine prenatal care during pregnancy could be totally free for you.
If you are not sure on what your insurance policy will cover in regards to pregnancy costs and you want to avoid surprise medical bills in your mailbox, we have listed the following helpful questions that nerdwallet.com suggests to consider asking your health insurance provider:
- 1During my pregnancy, are my prenatal visits covered under my policy?
- 2To go see an OB-GYN or other specialists I may require, do I need a referral from my primary doctor?
- 3For any prenatal care, do I need pre-authorization?
- 4What exact prenatal tests are covered under my policy (ultrasounds, genetic testing, amniocentesis, etc.)?
- 5Are there any common prenatal needs that are not covered by my policy?
Download your free guide to gain clarity faster!
This free guide will provide you with 2 things.
- 1Worksheet with all the important steps you should be taking, including all the questions you will want to ask.
- 2Worksheet to enter and automate your calculation as you read along
Download this free package if you want to make this process faster, easier and more fun!
Costs of Maternity Clothing
By the time of birth we will likely have spent around $300 to $500 on maternity clothing during pregnancy - shopping for quality, but nothing too fancy.
That’s an estimate of an additional $30 - $60 a month to add to your budget plan during pregnancy.
Your Action Step: Budget for Maternity Clothing
Depending on whether or not you plan to be wearing used maternity clothes from friends and family, or will purchase deals at thrift shops or decide to buy new clothing - you can budget anywhere from $0 to $60 per month.
6 Ways you may be able to save money on maternity clothing:
Prenatal vitamins are not considered a must, but are said to support having a healthy pregnancy – which is why it is another cost that we have listed to also consider in your budgeting plan.
Costs of Prenatal Vitamins
On average prenatal vitamins can cost you anywhere from $15 – 30 per month if you were to buy them over the counter.
Depending on your health insurance your prenatal vitamins could cost you little to nothing at all – you may just be subject to a copay.
According to the ´Women, Infants and Children Nutrition Program of Minnesota´ the best way to pay for prenatal vitamins is to ask your health care provider for a prescription.
Your Action Step: Budget for Prenatal Vitamins
Depending on whether or not you plan to be taking prenatal vitamins and if your health insurance covers the costs - you can budget anywhere from $0 to $30 per month.
Baby Gear and Essentials
When it comes to prepping for your baby’s arrival, without a list, it’s difficult to grasp the amount of stuff your tiny little human will need and how much that will cost.
From decorating the nursery, to buying all the must-have-essentials - the price that comes with having a baby certainly starts to add up at this point.
This can be quite overwhelming, especially for a first-time parent - not knowing what exactly is necessary.
And, it's no question that your little baby will be worth every penny.
To get an idea, we have listed some of the basic essentials - MUST HAVES - you will need to plan for the first 12 months:
Costs of Baby Gear and Essentials
According to our research below, as a first-time parent you can expect to spend around $850 to $7,700 on one-time purchases for baby gear and essentials.
This results in a necessary monthly budget of around $85 to $770 per month (at 10 months from conception to delivery) that you´ll want to be able to save to make the purchases for all the baby gear and essentials shortly before your baby arrives.
One-time purchases (1st year)
Nursery (crib, bedding, mattress, changing table, dresser, shelves, baskets, rocking chair, carpet)
$250 - $3,000
$25 - $75
$25 - $200
$20 - $70
Portable changing pad
$8 - $25
Infant first aid kit
$15 - $70
$7 - $30
Breast pump (*possibly free through health insurance plan)
$0 - $325
$12 - $90
Baby dish set
$10 - $70
Burp cloth set
$7 - $25
Baby car seat
$70 - $390
$125 - $1,200
$50 - $180
Portable baby bed
$20 - $120
Baby safety childproofing home (child safety gate, toilet locks, electric outlet locks, cabinet locks, table corner guards, stove know covers, strap locks for cabinets, drawers, door locks, child monitoring, smoke detector, swimming pool guard alarm)
$50 - $500
$25 - $200
High chair / booster seat
$30 - $400
Sensory toys, story books, etc.
$100 - $720
It's always a great idea to focus on the MUST-HAVE essentials (f.e. car seat) and wait on purchasing baby toys and baby gear like a high chair, baby bouncer, etc.. It will take quite a while until your little one has passed the newborn phase and is ready for such things.
Your Action Step: Budget for Baby Gear and Essentials
If you plan to purchase all new items on baby gear and essentials, plan to add between $85 to $770 per month that you will either want to have available or save up during pregnancy.
$0 / month
Check if your health insurance plan covers all prenatal care
$0 - $60 / month
Average monthly budget for maternity clothing
$0 - $30 / month
Average monthly budget for prenatal vitamins
$85 - $770 / month
Average monthly savings for baby gear and essentials
Key Takeaways on Budgeting for the Costs of Pregnancy
Considering your health insurance plan covers all standard procedures and you will go through pregnancy without complications you may want to plan your monthly budget during pregnancy within the shown ranges.
As a result you could plan to have a total of $85 to $860 per month available for expenses during pregnancy and savings for baby gear and essentials once your baby arrives.
Birthing classes are often covered by health insurance plans. If not, plan to spend around $50 to $200 for your one-time purchase in the 3rd trimester.
Baby CPR classes are offered online at a one-time price of $35.
Let's move on to the next big cost factor of having a baby that you will want to consider and plan for - the costs of delivering your baby.
Budget for the costs of delivery
According to a study published in January 2020, researchers looked at 657,061 American women who had health insurance. Turns out that the average labor and delivery costs for having a baby in the US are now more than 4,500 dollars out-of-pocket, even with insurance.
If you´re interested in learning more about the average costs of delivering a baby in your state, FAIR Health provided businessinsider with further information.
If you don’t have health insurance, again just like for prenatal care, the price for delivering a baby comes with a high price tag.
During our research we have found that the numbers vary widely. As you will see, it will be best to always determine the costs for your own individual situation and circumstances. Below you will learn more about what to ask your health insurance provider to help you find that out.
When you're trying to figure out how much your costs of delivering a baby will be, it cannot be emphasized enough how much your health plan and location matter.
Costs of delivery
If you want a quick rough estimate to calculate with, plan to save an additional $450 per month during pregnancy (10 months from conception to delivery). At average out-of-pocket delivery costs that could help you prepare for a majority of the costs of delivering your child. Keep in mind that this amount is an average amount based on having health insurance and a vaginal delivery without any complications.
Including the previous calculations, on average, that makes a total of $535 to $1,310 per month (costs of pregnancy including delivery) that you should be putting to the side during the 10 months of pregnancy so you can also cover the costs of delivery.
Your Action Step: Gain Clarity On What Delivery Costs Are Covered By Your Health Insurance Policy
If you are not sure on what your insurance policy covers and you want to avoid surprise medical bills in your mailbox, nerdwallet.com suggests to consider contacting your health insurance provider and ask the following questions:
- 1If for some reason I need a C-Section, is this covered with my current health insurance plan?
- 2Are there any common labor and delivery needs that are not covered by my policy?
- 3In my area, which hospitals are in my insurance policy’s network?
- 4To ensure that my newborn is covered from the moment of delivery, what do I have to do by when?
- 5After delivery, how long of a hospital stay is covered under my policy?
- 6Will my policy cover a private room or suite or will I have to share a room?
- 7If a home birth with a midwife, water birth or other nontraditional deliveries are more for you, ask your insurance about coverage for these.
Here are 3 additional tips to help you get a more detailed estimate on how much it will cost you to deliver a baby:
$450 / month
If you want to calculate with average costs, plan to save around $450 per month during 10 months of pregnancy to cover the average costs of $4,500 for a vaginal delivery without complications.
Key Takeaways on Budgeting for the Costs of Delivery
As the numbers on the costs to deliver a baby do vary widely, it will be best to determine the costs of delivery within your health plan and location by contacting your health insurance provider.
Now that we´ve covered budgeting for pregnancy and the delivery of a baby in the U.S. it is time to move on to the time after birth that you will also want to plan for so you can feel more at ease and prepared if you do decide to have a baby.
Budget for the time after birth
The US Department of Agriculture estimated in 2015 that a middle-income family with two children would spend around $ 12,900 per year, per child.
That makes $1,075 per month per child - again, the amount you will spend each month will depend on your own individual circumstances, location and preferences.
The 3 most underestimated recurring costs to consider in your monthly budget when your baby arrives
1 - Diapers
It is a great idea for you and your partner to talk about the costs of diapers for your baby ahead of time and how that will affect your wallet. You could be losing an opportunity to save a substantial amount of money...
Healthline.com estimates that a baby can go through about 3,000 disposable diapers in the first year alone. Children will need less diaper changes throughout the 2nd and 3rd year. Therefore, we are estimating an average use of 5,500 to 6,500 disposable diapers until a child is potty trained.
At costs ranging from $0.13 to $0.36 per disposable diaper (as seen online in October 2020) the total cost of diapers alone average around $735 for the first year.
Average monthly costs of baby diapers
For disposable diapers this results in an average cost of $60 per month per child that should be added into your monthly budget for the first year.
Now you may be thinking, what about the baby wipes?!
Yes, we also must add the wipes as well.
Average monthly cost of baby wipes
Let's assume using an average of 4 baby wipes (1 for number 1 and up to 10 for number 2) per diaper, on average we´ll have used 12,000 in the first year and a total of around 22,000 to 26,000 wipes until a child is potty trained.
If you purchase in bulk the price per baby wipe can be as low as $0.02 all the way up to $0.10 per wipe when purchasing packs with lower quantity such as a 64-count baby wipe pack.
This means, if we shop with less awareness of the cost per wipe, we can wind up paying up to $1,200 in total for the first year instead of around $240 total if we would have planned ahead. The average total cost for baby wipes will be around $720 for the first year (at $0.06 average cost per wipe).
For baby wipes this results in an additional $20 to $100 per month per child that should be added into your monthly budget for the first year. If you want to calculate with a buffer you can apply the average of $60 per month.
Your Action Step: Budget for Diapers and Baby Wipes
For the total costs on the use of disposable diapers and baby wipes you can calculate with $80 to $160 per month or apply the average total of $120 per month.
If you´re looking to make having a baby more affordable:
An opportunity to save money may be having a look into using cloth diapers. If you can get over the reluctance to use cloth diapers, you can save a substantial amount of money, in comparison to using disposable diapers - from what we can tell by our research - most often you can save up to half the costs on diapers.
Captrade.com estimates costs between $244 to $1,100 in the first year of a baby´s life to use cloth diapers - on average $664.
Things to think about when looking to use cloth diapers:
As we do value the option of using cloth diapers from an environmental and money-saving aspect, we decided to go with disposable diapers in the beginning - at least for the first 3 months.
2 - Baby Formula
If you choose not to or cannot breastfeed, baby formula will become a significant factor to add in to your future monthly budget for the first 12 months.
On the low end your baby will consume around 25 ounces per on average in the first year. With prices ranging from $0.09 to $0.32 per ounce, Baby Formula can cost around $68 to $240 dollars per month with a total ranging from $821.25 to $2,920 for your baby's first year.
This is a similar amount to what littlebundle.com states parents should expect to spend for baby formula in the U.S.. Their estimate ranges between $1,200 and $2,000 if you´re exclusively feeding formula during your baby's first year. Baby formulas with lactose will range at the higher end as lactose is a carbohydrate source that is also found in breastmilk.
Your expenses on the lower or higher end will depend on your choice of brands and type of formula preparation:
Your Action Step: Time after Birth - Budget for Baby Formula
For baby formula this results in an estimate of roughly $70 to $245 per month per child to be added into your monthly budget for the first year if you´re unable to breastfeed. Remember, the amount you will be paying depends on your preferences and choice of quality of baby formula.
Here are 8 steps on how you could save on baby formula when looking to make having a baby more affordable:
- 1Learn about what nutrients a baby needs.
- 2Learn about the various types of baby formula.
- 3Find out what sacrifices you are willing to make in relation to cost and quality of formula.
- 4Learn about the necessary quantity of formula needed in first year.
- 5Check comparison on price and quality of the type of formula you chose.
- 6Calculate how much the purchase of a bulk order would cost.
- 7Remember to test before purchase! When the baby arrives start small to see what your little one prefers.
- 8Purchase your baby´s favorite formula in bulk.
3 - Baby Clothing
Even though we can all imagine that it is easily possible to spend over $60 on one single purchase in a store when shopping for baby outfits, we want to have some sort of number we can calculate with to figure out how much our monthly budget should be once the baby is born.
Average monthly cost of baby clothing
Investopedia.com estimates that the average budget for baby clothes in the first year will be around $60 per month.
momlovesbest.com states the average spend to be around $15 to $50 per month. The lower end will be related to making purchases of used clothing.
Your Action Step: Time after Birth - Budget for Baby Clothing
When the time comes you may find yourself experiencing the urge to go all out on shopping for baby clothing - we get it, it´s so freakin´ cute!!! It´s even possible to spend $60 or more on one single item... but if you´re planning to budget, calculating with $15 to $60 per month can be a helpful range to start.
Budgeting for the costs of Health Insurance coverage for a newborn baby
The American Academy of Pediatrics (AAP) recommends 7 visits to the doctor's office in the first year. 
Determining the necessary additional monthly budget for your baby's health insurance in the U.S. can be a tricky one.
In general, according to momlovesbest.com, on average parents that have a private health insurance plan can expect to pay an additional $35 to $65 monthly to the current premium of their plan.
At healthcare.com we found information that will help you figure out your individual monthly budget on health insurance for a newborn. We have listed the main options below, for further details you can read their post.
Your Action Step: Determine how much health insurance for a newborn will cost you
4 options to determine the monthly costs of health insurance for a newborn:
Keep in mind that Medicare does not cover dependents. This means if you and/or your partner have Medicare, your little one cannot be added to that plan - he or she will need their own coverage instead.
What if adding your child to your health plan is too expensive?
If you don't have the option to add your child to your plan or it seems too expensive healthcare.com offers helpful information on how to get individual health insurance for your child.
Budget for time off after birth Of Your Baby
Maternity leave is definitely something you will want to discuss with each other when planning the monthly budget you will need to have available once your baby arrives.
Besides, who doesn´t want to bond with their newly arrived baby?!
More than likely you will want to take time off from work after the birth of your newborn to take care of your baby and recover.
Luckily due to the Family and Medical Leave Act (FMLA) in the United States employees are allowed up to 12 weeks in a 12 month period to take leave to care for a newborn as long as they have worked for the company at least 12 months or have put in at least 1,250 hours during the past 12 months.
When attempting to plan for time off after the birth of a child we also need to keep in mind that the FMLA is designed to allow employees to take unpaid leave to take care of family or medical issues.
The FMLA applies to companies with 50 or more employees.
Paid Maternity Leave
According to a 2018 Mercer survey, only 41% of employers in the United states offer paid maternity leave for their employees.
Paid State Family Leave
California, New Jersey, New York, and Rhode Island are only a few states in the USA that offer paid leave.
If you live in any of the states mentioned above you may be eligible for state leave benefits, meaning up to 4 weeks (Rhode Island) to 10 weeks (New Jersey) of paid leave.
In California for example, according to a Congressional Research Service Report, benefits are paid weekly and maximum pay out is $1,252 per week, depending on your pay – about 60% - 70 % of your pay.
Your Action Step: Plan for time off after the birth of your baby
Contact your employer to learn about maternity leave regulations within the company and if you will be receiving income during your time off.
Also, check if the state you live in offers paid family leave.
3 optional costs you may want to Consider once your baby arrives
Depending on the musts/needs/wants you have set as terms and conditions for yourselves at the beginning of this guide, you may want to add recurring monthly costs to your budget for the following options.
Even though researching all kinds of baby stuff and baby names can be fun and exciting, you will also want to figure out what you will do with your baby once you go back to work - and how much that will cost you - ahead of time.
We know, no one wants to really look into this topic… who really wants to leave their newborn child with a stranger…
But let's face it, if we can't change it, we better gain clarity on this topic as soon as possible as the options available and the costs do vary widely.
Here are some helpful questions you will want to ask yourselves to find your solution:
Average Monthly Costs of the 4 Most Common Day Care Options
Day Care Option 1 - Nanny
This is the most expensive option.
A nanny is an in-home child care provider with a variety of responsibilities. Their responsibilities can range from bathing and dressing, changing diapers, potty training to washing clothes, prepping meals and feeding and supporting with educational activities.
Nanny´s are committed to helping your child grow, learn and feel safe.
When hiring a nanny you will have different options to choose from:
According to care.com a full-time live-out nanny is usually paid per hour for 40 hours a week. Based on national averages from care.com, depending on their education and experience the hour rate will average around $14 in the U.S..
Monthly Costs Of Hiring A Full-Time Nanny
This means at an average of roughly $560 per week (40hrs/week) you will have to plan for spending $2,240 per month to hire a full-time, live-out nanny.
Keep in mind - believe it or not - there most likely will be additional costs such as yearly pay raises, paying “nanny taxes”, annual bonuses, food costs, insurance, reimbursements for gas, etc..
Day Care Option 2 - Nanny Share
This option allows you to enjoy a lot of the nanny benefits without the nanny price tag. You and another family share one nanny for your and their children - you split the costs. Before choosing this option check for any restrictions in your state.
According to the ´Care.com 2020 Cost of Care survey´, when choosing nanny sharing you will pay around 2/3 of the national average.
Monthly Costs Of Hiring For Nanny Sharing
This means, with 2/3 of the national average of $2,260 per month you will have to pay around $1,508 per month for nanny sharing.
Day Care Option 3 - Day Care Center
This is the most popular choice for many working parents. Day care centers are said to be reliable as most are licensed by the state to follow strict rules and regulations, and some offer longer or flexible hours.
Monthly Costs Of Day Care Center
When choosing to have your child taken care of in a day care center in the U.S. your average necessary monthly budget will be around $990 per month for an infant and $847 for a toddler.
Day Care Option 4 - Babysitter
This is also a very common option for parents.
Babysitters can be a solution for parents that need temporary support on an hourly basis. They usually have basic child training experience, CPR and first aid certification. The line of duty a babysitter covers in comparison to a nanny will often be less. Their hourly rate can be higher than the rate you would pay for a nanny as they are often flexible in their time and paid by the hour.
Monthly Costs Of Hiring A Babysitter
At a weekly rate of $243 at 15hrs per week you will have to add around $972 to your monthly necessary budget for a babysitter.
Your Action Step: Determine monthly budget for day care in your area
If you´re like us you may have never thought of getting life insurance before... But once you realize there is a living being on its way that you are responsible for, the thought of financial security if anything happened to one of you, becomes very real.
Monthly Costs Of Life Insurance
For that case, if you will want to have some sort of financial protection for your family, according to policygenius.com you´ll pay around $33 per month on average in the U.S.. This will provide you with a 20-year term life insurance policy and death benefit of $500,000.
Your individual monthly rate will be based on your age, health status, whether you smoke or not and various other factors.
Your Action Step: Determine monthly budget for life insurance
Visit policygenius.com to figure out how much you will want to budget to pay for life insurance for you and your partner.
Perhaps you still have income left after all the budgeting that you may want to invest on behalf of your baby - if you happen to choose wanting to become a parent. Depending on what you will be saving for (529 plan, Coverdell ESA, S&P 500 index fund, etc.) there are various options for you to choose from to put your money to work for your child.
On the topic of investing on behalf of a newborn child two financial planners with expertise in family finances were interviewed by fatherly.com. Robin Taub and Matt Becker suggest to first take care of planning and investing for your own future, paying off debt and saving for retirement. The whole idea of investing for your children is that you want to help them later on. But when you think of the biggest financial gift that you can actually give your children - that is, not moving in with them when you're retired. So taking care of yourself first may be a wiser option.
Your Action Step: Determine your monthly budget for an education fund
Add whatever amount to your future monthly budget you feel will be right for you.
Depending on your financial framework that you set up at the beginning of this guide, the amount you will be spending on a monthly basis after the birth of a child will vary based on your personal preferences.
Here´s is an example of what we plan to be spending per month after the birth of our first child:
Diapers and Wipes
$120/month (we plan to make bulk purchases ahead of time)
$100/month (as a possible supplement to breastfeeding)
$30/month (very generous, including soaps, creams, etc.)
One of us will stay at home with the baby
$100/month (for the both of us)
This leads us to a total of $500 per month we plan on spending after the birth of our baby.
In our case, overall we will have less money available as a single income household by deciding that one of us will stay at home. We are also able to experience many benefits because of that decision. These benefits include having the freedom of one of us always being with our child. No costs for daycare. Another great bonus is being able to add our child to our family health insurance for free where we live. Not to mention having a budget available for life insurance for the both of us and being able to create an education fund for our little one.
We were able to create our budgeting plan based on our financial framework we set up at the beginning. This process allowed us to gain the financial certainty and clarity we were seeking to decide whether or not it was the right time for us - and we decided it was!
At the time of creating this guide our little one is already on his way!
Less than $1,075 / month
If you´re willing to plan in advance, you can save a substantial amount of money each month to make having a child more affordable.
Key Takeaways on Budgeting for the after birth
It is possible to stay below the monthly average of $1,075 per child as estimated by the US Department of Agriculture.
At this point you should have a pretty accurate plan of what costs you want to prepare for if you decide to have a baby.
Now it's your turn! You can download the calculation cheat sheet here!
But hold on - that's not all!
After all this budgeting we found that there was still a voice in the back of our heads going: What if…?! Are you sure you got everything? Are we missing or forgetting anything?
Having clarity on how to prepare for any bills that we hadn't expected or planned for, and possibly couldn't pay - seemed like the next best step to create even more certainty.
What hidden costs can come up when having a baby?
Surprise medical billing by accidentally using an out-of-network doctor
As nerdwallet.com states, this can happen when you go to a hospital in your provider network where an out-of-network doctor is practicing.
Some states in the U.S. protect against surprise medical billing. Unfortunately, currently most states do not protect patients from non-network charges. Therefore, it is important to get informed what your health insurance provider will cover.
The website HealthEngine.com can possibly help you shop for medical services that are covered by your insurance policy.
Your Action Step: Prepare so you can avoid surprise medical billing
What could you do if you do receive a surprise bill?
At this point we have reached the end of step 2 on budgeting for the costs of having a baby. Now it´s time to have a look at the options that are available to make having a baby in the U.S. more affordable.
What can you do to make having a baby in the U.S. more affordable?
Start putting money to the side on a monthly basis before your little one arrives, at least 6 months before your little one arrives. The idea is to already create the habit of budgeting and have enough money saved to cover any deductible, your coinsurance share or any other unexpected charges.
Adjust your lifestyle in advance
Decide on how you can lower your cost of living and spending habits. Your expenses will rise after your baby is born. So it's a good idea to start making lifestyle changes now. In addition, that may help you save some extra dollars.
Gain clarity about your health insurance policy
Contact your health care insurance company to find out exactly what all is and is not covered. As we have listed above, nerdwallet.com has a great list of questions to ask during your call. Have your policy number ready and write down the date and name of who you spoke with.
Invest the time to get the information you need. The more you are willing to research now, the less likely you will receive bills in the mail that you are not prepared for. As nerdwallet.com states, you want to especially focus on learning about two key areas:
Gain clarity on which hospitals in your area are in your insurance policy's network
Your health insurance plan may cover the costs of delivery, but maybe not at the hospital you want to deliver at. Check with your health insurance company and call the hospital's billing office to have an estimate of total costs for childbirth with your chosen hospital as prices can vary quite a bit.
Do this even if you´re just comparing local hospitals.
As nerdwallet.com states, a group of researchers at the University of California, San Francisco, discovered that the cost of a vaginal birth without complications can range from $ 3,296 to $ 37,227.
The difference for Cesarean sections was even greater, with a range from $ 8,312 to around $ 71,000.
Know what costs may be included in your hospital bills
Ruth Soukup at livingwellspendingless.com suggests the following list of questions to also consider as well when your comparing the prices of hospitals:
Contact your OB-GYN ahead of time
Ask your OB-GYN if he or she will be using global billing.
Depending on the time of year you will be having your child, you may have to pay two deductibles for the current and next calendar year.
With global billing you´ll have a packaged charge that can include all prenatal charges as well as the costs of giving birth.
Decide on who will care for your baby after giving birth
Will one of you be able to stay home from work or will you have to hire day care? Can you work from home? If you´re hiring an in-home caregiver could you team up with other families to cut the costs? Do you live close to family members that would be willing to provide child care?
9 additional ways to prepare and lower costs of having a baby in the U.S.
- 1If you don't have health insurance or good insurance coverage you can seek help ahead of time. You could also call and ask your hospital about discounts or payment plans. In that case, always ask for all details on how that works and write them down.
- 2If you have health insurance, find out how much your premium will be to add another dependent to your health plan once your little one is born.
- 3Check with your employer and ask about the workplace policies to find out how much of maternity and paid leave you will have available ahead of time.
- 4As expenses can add up, focus on paying off debt or to get it to a manageable level if you have any.
- 5Research how much you can save on the difference in the cost of diapers or cloth diapers as well as baby food from the store and home-made baby food.
- 6Borrow as much as you can from family and friends. Your baby will grow out of everything quite quickly.
- 7Figure out what you could and would be willing to shop for second hand, for example on craigslist.com.
- 8You can also seek discounts at babycheapskate.com.
- 9Set up a registry during pregnancy and throw a baby shower.
Summarizing step 2 on budgeting for the costs of having a baby, there is probably no set dollar amount that will tell you when you're ready to have a baby. But you can understand the costs of having a baby and define your own financial guidelines that you can base your decision on to feel more certain.
Doing your homework prior to getting the ball rolling and being aware of potential costs, as well as what to look out for, and now having plenty of ideas on how to prepare - you can be well on your way to making your life less stressful if you happen to have come to the decision that you are going to have a baby.
Step 3 - Answer The Big Question: Are You Ready To Have A Baby?
With this guide we hope you've found lots of ways on how you can make it happen and now have the confidence and clarity, resting assured that everything will be ok when you move on to trying to conceive your first child.
We must say, considering all costs above, were quite overwhelming and a shock for us at first. As a single-income household we realized that we had to make some sacrifices, if we wanted to create our own family anytime soon.
As we are currently living in Europe and have planned to move to the U.S. sometime in the future - having family here too and the way things are currently going with the pandemic, we are having our first child here.
We have found that managing and budgeting our money on a monthly basis has helped us to plan for our baby. Now, after calculating, thinking and talking this through together, we feel financially ready and more prepared to welcome a new little life into this world.
What is your final answer - can you afford to have a child - do you feel ready?
If you have only skimmed this guide so far, do yourselves the favor and work through the steps in this guide or download it to help you gain the clarity you need!
Take advantage of this guide to become clear on whether or not you are financially ready to have a baby now!
Become more certain about your financial situation so you can come to a clear decision that feels right to you - and if you happen to decide to have a child, you will be able to enjoy the entire process A WHOLE LOT MORE.
We hope you've learned what you need to know and are well on your way to conceiving and pregnancy.
Before you actually start trying to conceive your first child, you may want to apply these steps to drastically increase your chances of conception.
Please feel free to contact us at firstname.lastname@example.org and provide any suggestions on how you feel we could add even more value with this guide.
We appreciate your feedback!
Wishing you all the best and hoping to hear from you and your little one(s) anytime soon…
This editorial content from partofyourworld.org is not written by a health insurance professional. This content is intended for informational purposes only. Do not consider this content as legal, financial or health insurance advice. Consult a professional to learn what is right for you.
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